What does 'Restaurant Net Positive' mean in the context of the Checkersrallys royalty fee abatement?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
evant supporting documentation, that: (a) you are a current franchisee in good standing with us, including being in full compliance with all currently effective agreements with us or our affiliates; and (b) you will develop the Franchised Restaurant in accordance with our current prescribed plans, specifications and design model for Restaurants (including,
without limitation, any modifications or adjustments we authorize and timely introduce for similarly-situated Restaurants, or otherwise incorporate into the System for all franchisees, before you open the Franchised Restaurant).
3. Conditional Development Incentive and Reduced Fee(s).
- a. Royalty Fee Abatement: If you meet the following criteria: (i) you open the Franchised Restaurant to the general public within 18 months of signing the Franchise Agreement; (ii) the Franchised Restaurant complies with the current reimaging requirements and (iii) you, your owners, or your and their affiliates are Restaurant Net Positive (defined below) at the time the Franchised Restaurant opens, then we will waive the royalty fee payable under the Franchise Agreement until the earlier of: (a) the total value of the royalty fee abatement (calculated based
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, 'Restaurant Net Positive' is a criterion that must be met to qualify for a royalty fee abatement. Specifically, to be considered 'Restaurant Net Positive,' the total number of restaurants operated by the franchisee, their owners, or their affiliates at the time the new franchised restaurant opens must be greater than the number of restaurants they operated as of December 30, 2024.
In simpler terms, Checkersrallys wants to incentivize growth. If a franchisee or their associated business entities have expanded their restaurant holdings since December 30, 2024, they are considered 'Restaurant Net Positive.' This is one of three conditions that must be met to qualify for the royalty fee abatement. The other two conditions are opening the franchised restaurant within 18 months of signing the Franchise Agreement and complying with the current reimaging requirements.
If a franchisee meets all three of these conditions, Checkersrallys will waive the royalty fee until the earlier of two scenarios: either the total value of the waived royalty fees reaches $75,000, or the franchised restaurant has been operating for 24 months. This incentive is designed to encourage franchisees to develop and open new Checkersrallys locations, rewarding those who are actively growing their business.
It is important to note that the FDD excerpt indicates that the number of restaurants operated by the franchisee as of December 30, 2024, was to be specified in a blank field, which is represented as '[__]' in the document. A prospective franchisee should confirm this number with Checkersrallys to accurately assess their eligibility for the royalty fee abatement.